How does the new $99 million salary cap projection impact the Miami Heat?

Miami’s James Johnson and Wayne Ellington celebrate during a game at Detroit last season. (Photo by Gregory Shamus/Getty Images)

MIAMI — The NBA reportedly notified teams in a memo Wednesday that the projected salary cap for this upcoming season is $99 million, which is about $2 million less than previous estimates of $101 million.

With the start of free agency set for July 1, this impacts the amount of cap space Miami will have to spend. With the updated salary cap projection, the Heat are left with about $35 million in cap space.

How do do we calculate $35 million in cap space for the Heat? You arrive at that number only when counting the 2017-18 salaries of Hassan Whiteside ($23.8 million), Goran Dragic ($17 million), Josh McRoberts ($6 million), Tyler Johnson ($5.9 million), Justise Winslow ($2.7 million), Josh Richardson ($1.5 million), Rodney McGruder ($1.3 million), Okaro White ($1.3 million), the player the Heat draft at No. 14 ($2.5 million), and three cap holds to fill a minimum 12-player roster that would combine to account for about $2.4 million.

(Note: Richardson, McGruder and White are on non-guaranteed contracts. But let’s assume the Heat bring back all three next season.)

Add all of these numbers up, and the Heat have about $64.4 million currently invested in their roster. When you use the new projected 2017-18 salary cap of $99 million and subtract the $64.4 million Miami already has on its cap, it leaves the Heat with about $34.6 million to spend this offseason along with $4.3 million and $3.3 million exceptions at their disposal.

If the Heat choose to retain Wayne Ellington and pick up his $6.3 million team option, Miami is left with about $28.3 million. That’s not enough to also sign a player like impending free agent Gordon Hayward to a maximum contract.

The new salary cap projection also drives down the price of max contracts, which are determined by the cap. Under the projected $99 million salary cap, Hayward is eligible for a $29.7 million max contract.

In addition to all of this, the luxury tax has been lowered from $121 million to a projection of $119 million.

What’s the reason for the new salary cap number? The drop was caused by the number of playoff games being fewer than expected, with the Cavaliers and Warriors losing a combined one game on their way to the Finals.